P L D 1963 (W (PLP)

"Whether in the circumstances of the case, the cash deposit of Rs. 15,000 in an undisclosed name, was not income from . undisclosed source."

2. The facts briefly stated are these : The respondent is a registered firm dealing in G. 1. pipes, fittings, hardware and motor cycles. The Income-tax Officer noticed a cash credit entry of Rs. 15,000 dated 7th September 1953 in an account styled as "Deposit Account" in the books of the respondent. The Income -tax officer felt suspicious about the nature of this cash receipt and called upon the assessee to explain its source. The explana tion offered was that the deposit in question represented cash received as an advance from a customer and the money was to be returned in case the transaction did not materialise. There was an entry in the same account showing that the said amount of Ids. 15,000 was returned on 1st October 1953. The Income-tax officer disbelieved this explanation and treated this amount as respondent's income from undisclosed source. The matter was taken in appeal to the Appellate Assistant Commissioner by the assessee who upheld the finding of the Income-tax Officer. The assessee then took the matter in a second appeal before the Tribunal, and his plea that the sum represented a capital receipt was accepted by the Tribunal and in doing so they observed as follows : "It is also urged that the book result of the assessee has always been accepted in the past and even for the year in question ; there was no good reason to doubt the explanation offered for this item. Further that the assessment for the relevant year has been made on a total income of over Rs.5,50,000 and roughly . the share of the four partners works out to Rs. 1,42,276 each. In the face of these data it is stressed that the assessee could not attempt a fraud on the revenue by concealing a very small portion of its alleged income. The assessee could have manipulated its accounts in other respects to get a better advantage had it really been dishonest. Keeping in mind the above facts and the record of the assessee over . a long number of years past we think the assessing authorities were not right in treating the said deposit to be a revenue receipt." It was stressed before the Tribunal on behalf of the Department that in view of the fact that the assessee had failed to disclose the name of the depositor it should have been held that the amount in question was suppressed profit from an undisclosed source and not a capital receipt. While repelling this contention the Tribunal pointed out that it was true that when an entry of cash credit was introduced in the books by the assessee it was x matter in his special knowledge and he should have explained it in a convincing manner but, they went on to observe, that there can be circumstances in which a businessman may not like to disclose the particulars and from that it did not necessarily follow that the deposited sum could be treated as revenue receipt. Then they summed up their finding as follows "We think that on the facts here, there existed ample circum stantial evidence to believe that the amount of Rs. 15,000 was not an income from undisclosed source but a genuine deposit made by a customer." In this view of the matter they held that there being material on the record for the finding arrived at by them, the question was purely of fact and no point of law arose which might be referred to the.1ligh Court. The Appellate Assistant Commissioner then moved the present application to this Court.

3. We agree with the Tribunal that the question whether a certain cash deposit was the income of the assessee from an undisclosed source or that it represented a capital receipt, is purely one of fact. Mr. Noorul Arfin, the learned counsel for the applicant, conceded that the frame of the question was defective but he urged that the question upon which the Department wanted the opinion of this Court, was whether from the very fact that the name of the depositor was not disclosed, it would not follow inevitably that the amount concerned was an income of the assessee from an undisclosed source. He stated that the correct form of question would be "Whether there was any material for the Tribunal to delete the add-back of Rs. 15,000. "We allowed him to advance his arguments upon this basis because the Tribunal has, in fact in its order refusing) to refer the question to this Court, observed that there was material on the record for the finding arrived at by them.

4. The argument of Mr. Noorul Arfin was that the onus of explaining the nature of the entry, such as the one in question, Was on the assessee and inasmuch as he failed to disclose the name of the person, who was alleged to have made the deposit, it should have been held that he had failed 'to discharge the onus and the only finding then possible was that this was not a capital receipt but an income from undisclosed source. We cannot accept this contention. It is true the onus is upon the assessee because, as the Tribunal have observed, it was a matter within his special knowledge, but we cannot agree that the only way of discharging that onus is by disclosing the name of the person in whose name the entry is credited or that when such a disclosure is not made it must necessarily follow, whatever be the other circumstances of the case, that the entry represents an income from an undisclosed source. When the assessee stated that the entry in question represented a deposit from a customer and the money was to be returned in case the transaction did not materialise and when an entry was shown in the accounts of a date only three weeks after the date of deposit showing that the money had been returned, there can be little doubt that an explanation was offered. This explanation was given towards the discharging of onus which initially lay upon the assessee. The question which then arose was whether this explanation was acceptable, and we cannot bring ourselves to hold that an explanation made in such circumstances must invariably be rejected upon the sole ground of the non-disclosure of the name of the person making the deposit, whatever be the other circumstances of the case, and that from such a non-disclosure the sum must be treated. as a revenue receipt. The question really is one of fact and must be determined upon all the circumstances of a particular case. In the present case, the assessment for the relevant years had been made on a total income of Rs. 5,50,000 and roughly the share of each of the four partners worked out to Rs. 1,42,276 ; that the book result of the assessee had always been accepted in the past and it was rightly stressed before the Tribunal that if the assessee wanted to conceal its income, Rs. 15,000 would be a very small sum in that context and that if it did want to do it, there would be other and more effective ways of doing it by manipulating the accounts. Now, these were the circumstances in the case and the assessee had offered an explanation in respect the entry in question which was supported by a subsequent entry of the return of that amount. It was for the Tribunal to weigh these circumstances, which they did, and upon doing so they came to the conclusion that the assessing authorities were not right in treating the said deposit as a revenue .receipt. An onus is not something which is stationery and it cannot be laid down that it can be discharged only by a particular kind of evidence or information. In the present case the Tribunal took into consideration the relevant circumstances upon which they found the explanation of the assessee to be acceptable and it cap not be said that a question of law arose merely because the name of the person making the deposit had not been disclosed. In a given case there may be a good reason for an assessee not to do so but whether the explanation, notwithstanding the non disclosure of the name is accepted or not, is one which must depend upon the circumstances of a particular case.

5. We asked Mr. Arfin that if in this particular case the entry in question had been of Rs. 50 and not of Rs. 15,000 would he still say that it should have been treated as a sum representing undisclosed income of the assessee, and he said that for such a small sum he would not be justified in urging that point. But why not. If from the mere fact of the non-disclosure of the name of the person making the deposit "it must follow inevitably" that the amount represents undisclosed profit why should it not be so held when the amount is a small one ? The answer obviously is that the smallness of the amount is a circumstance to be taken into consideration in favour of accepting an explanation rendered by the assessee. Likewise, there may be other circumstances such as the past record of the assessee, the nature of this book, the kind of his business and so on. It cannot, therefore, be urged that whenever an assessee declines to disclose the name of a person in whose favour the credit entry is made, it must in all cases, he held to be a case of suppressed income regardless of all other circumstances of the case.

6. For the reasons given above we are of the opinion that no question of law arises in this case and we, therefore, dismiss the application with costs. Application dismissed.